What’s Behind the Theme Park Craze?

After five years of construction， the Shanghai Disney Resort finally opened its doors to the public on June 16， drawing gigantic crowds of excited visitors.

Theme parks are becoming an increasingly popular form of entertainment in China. The clamor for them has led to the construction of a range of parks， as forest-， ocean- and sports-themed sites are sprouting up across the nation. Discussions surrounding the first Disney resort on the Chinese mainland have flooded various social media platforms.

Why have theme parks struck such a chord among investors and tourists？ Much of the reason can be attributed to the rapid growth of the Chinese economy. As peoples wages increase， they have more disposable income for tourism and leisure， which become a greater part of their lives.

Last year， over 4 billion domestic sightseeing tours were made， and Chinas tourism revenue exceeded 4 trillion yuan （$608 billion）， ranking first worldwide in both categories， according to the National Tourism Administration.

Theme parks have offered an alternative option to more traditional holiday trips， for example a visit to natural scenic spots or cultural and historic sites. According to a report published by Suzhou-based tourism service provider LY.com in May， over 80 per- cent of those surveyed rated theme parks as their top choice for family trips. AECOM， an American multinational engineering firm， predicted that China will overtake the United States to become the largest theme park market by 2020.

The tantalizing prospects behind these parks is luring investors to the sector. However， the financial performance of domestic parks is unsatisfying. More than 300 theme parks have opened in China over the past decade， yet less than 10 percent have been profitable.

Colossal costs including huge investment and high maintenance fees are primary reasons for their unprofitability. Additionally， many theme parks are too similar， which is a serious problem when some cities have several relatively indistinguishable parks. Most theme parks lack innovation and cultural connotations.

However， its worrisome that the high financial risks havent been adequately addressed by investors. Both domestic and foreign players such as Wanda， Chimelong and Universal Studios are scouting new sites for future parks. Thus， competition in this industry is likely to grow fiercer. If the profits generated cannot meet the expectations of investors， will theme parks become a new form of ghost city？ The expanding sector is set for a roller coaster ride.